Ford CEO's pay put at $28 million

SEC filing lays out salary, stock, add-ons

April 06, 2007|By Detroit Free Press

DETROIT -- Struggling Ford Motor Co., which posted a record $12.7 billion loss in 2006, agreed to pay its new CEO, Alan R. Mulally, more than $28 million to help rescue the 103-year-old automaker, according to a filing yesterday with the Securities and Exchange Commission.

Mulally, a former Boeing Co. executive who was the keynote speaker at the New York auto show this week, publicly accepted the Ford job in September.

While his annual salary is set at $2 million, his compensation package for last year included $666,667 in salary for the final quarter of the year, as well as a host of other add-ons. That included bonuses totaling $18.5 million - a $7.5 million hiring bonus and another $11 million to offset stock options and other compensation he forfeited when he left Boeing.

Ford also booked $8.68 million for Mulally's stock options and other stock-based awards. The remainder of his compensation, about $335,000, included $172,974 for his required use of the corporate aircraft and $55,469 for relocation costs and temporary housing.

The regulatory filing also laid out what Mulally would receive if he were terminated "not for cause" or for "good reason," such as a change in control, at the automaker. His severance package will be worth $27.5 million, including salary, incentive-based pay and stock and options. If he is terminated "for cause," he would receive nothing.

Daniel Moynihan, a principal at Compensation Resources Inc. in New Jersey, which specializes in executive compensation, said Ford had to pay Mulally that kind of money to attract him to the troubled company from Boeing, where he had worked for 37 years.

"It takes serious money to do that," he said, noting that the amount was similar to what Hewlett-Packard Co. paid its former CEO Carly Fiorina to leave Lucent Technologies Inc.

Meanwhile, Mark Fields, Ford president of the Americas, received a total of $5.6 million in 2006. In addition to his $1.2 million salary, the expense for his stock options and other stock-based awards totaled $567,308.

He also received $2.7 million in performance-based compensation, which included a $375,000 payment under the company's annual incentive compensation plan and a cash settlement of $2.3 million under the 2006-2008 Senior Executive Retention Incentive Arrangement for certain executive officers.

The Americas division, which manages operations in the United States, Canada and Mexico, was the company's most troubled, posting a pretax loss of $5.6 billion in 2006. But Fields' senior executive incentive retention award was based on his performance related to Ford's Way Forward restructuring plan, which aims to make the North American unit profitable again by 2009.

Fields' compensation also included an increase of $437,318 in the value of his pension benefits. The remainder of his compensation totaled $656,791, including $517,560 for personal use of the company aircraft, a perk he gave up after public criticism of his weekend trips home to Florida.

Bill Ford, executive chairman and former CEO, received no cash salary, bonus or other awards in 2006. His 2006 compensation, however, totaled $10.5 million, which came from previous stock awards, options and other compensation.

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